ACCA/CAT

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Section A–BOTH questions are compulsory and MUST be attempted

1 Film Productions Co(FP)is a small international company producing films for cinema release and also for sale on DVD or to television companies.FP deals with all areas of the production from casting,directing and managing the artists to negotiating distribution deals with cinema chains and TV channels.The industry is driven by the tastes of its films' audience,which when accurately predicted can lead to high levels of profitability on a successful film.

The company's stated mission is to 'produce fantastic films that have mass appeal'.The company makes around $200 million of sales each year equally split between a share of cinema takings,DVD sales and TV rights.FP has released 32 films in the past five years.Each film costs an average of $18 million and takes 12 months to produce from initial commissioning through to the final version.Production control is important in order to hit certain key holiday periods for releasing films at the cinema or on DVD.

The company's films have been moderately successful in winning industry awards although FP has never won any major award.Its aims have been primarily commercial with artistic considerations secondary.

The company uses a top-down approach to strategy development with objectives leading to critical success factors(CSFs)which must then be measured using performance indicators.Currently,the company has identified a number of critical success factors.The two most important of these are viewed as:

(i)improve audience satisfaction

(ii)strengthen profitability in operations

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